Spanish bank Santander made more profit in Britain and Brazil than in its home market for the first time, it emerged today , as the group admitted the flotation of its UK arm would be delayed until the second half of 2011.

Profits in the Spanish division have been held back by an ailing economy and troubled property market, which has also weighed down the share price of the bank. The shares were down 31% last year when the Bank of Spain took a tougher stance against property loans causing Santander to take an extraordinary provision of €472m (£399m) in the third quarter.

In Britain, where Santander has expanded rapidly in the past five years by buying Abbey National, Alliance & Leicester and parts of Bradford & Bingley, profit rose 11% to £1.7bn, which the bank said was 18% of the total group profit of €8.1bn. Spain contributed just 15% to group profits, which were down 8.5% year-on-year, while Brazil accounted for 25% of the total.

Emilio Botín, Santander's chairman, tried to play down concerns about Spain. "Doubts about Spain are absolutely exaggerated. Frivolous comparisons have been made with other economies whose public finances and financial systems are far more fragile than ours," Botín said.

Analysts at Morgan Stanley said this may have a "modest negative read-across" for Lloyds, but noted that impairment charges at Santander UK were improving, down 16% year-on-year to £651m. Santander is on course to have more branches in the UK than its arch rival HSBC.